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NEW QUESTION 196
Which two individuals are ordinarily beneficial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)
- A. Those who have legal title to a controlling share interest in the customer
- B. Those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence
- C. Those two are authorized signers on the account
- D. Those who generally have ultimate control through ownership or other means over the funds in the account
Answer: B,D
NEW QUESTION 197
A prospective AML officer comes highly recommended by a bank's up-stream correspondent institution of similar size and make-up, located in a different city in the same country. The bank is interested in hiring the individual. What should be the next step taken by the Board of Directors?
- A. Confer with its regulatory agency to determine whether it is appropriate to hire the person
- B. Do a thorough background check
- C. Hire the individual, relying on the recommendation of its correspondent
- D. Hire the individual on a probationary basis so that the institution can determine if the individualis sufficiently experienced and capable
Answer: B
NEW QUESTION 198
An organization uses an automated surveillance system that generates a very large volume of anti-money laundering alerts. The monthly volume of alerts has increased over the last year causing the compliance staff to fall significantly behind reviewing the alerts. As a result, the system settings are under review to determine if they are appropriate.
Which action should be included in the evaluation of system settings?
- A. Compare settings to organizations within its peer group
- B. Review parameter settings based on the latest risk assessment
- C. Flag filters with no history of generating an alert for removal
- D. Calibrate parameters based on staffing capabilities to clear alerts
Answer: B
NEW QUESTION 199
What should senior management do in order to promote a culture of anti-money laundering compliance?
- A. They should include compliance with AML procedures as condition of employment
- B. They should attend all training sessions with front-line employment
- C. They should base employee compensation on the amount of suspicious activity they detect
- D. They should have close ties with the independent auditors of the AML program
Answer: A
NEW QUESTION 200
An internal investigation log is primarily intended to:
- A. Report status of investigations to the Board of Directors.
- B. Provide training on investigations to the anti-money laundering officer and Financial Intelligence Unit.
- C. Detect and monitor possible suspicious activity.
- D. Track the status of investigations into unusual activity.
Answer: C
NEW QUESTION 201
The new compliance officer has reviewed the bank's anti-money laundering training program. The program consists of online training for all new employees within 30 days of hire date and annual refresher training to all employees. In addition, there is specialized training for areas that deal with higher risk products and customers.
Over the last year, there have been no regulatory changes and no new products or services have been introduced. The compliance officer wants to propose to the board of directors that the annual refresher training is still current and can be delivered unchanged to all employees.
Which two critical pieces of information could be missed by taking this approach? (Choose two.)
- A. Links to enforcement actions identifying violations in other financial institutions
- B. Changes to internal policies, procedures, and processes
- C. Any new trends, developments, or risks
- D. Results of the previous year's risk assessment
Answer: B,D
NEW QUESTION 202
In which situation can money laundering adversely affect a country's currencies and interest rates due to launderers investing dirty funds?
- A. They invest in legitimate companies as a way of making their funds appear to be legitimate
- B. They invest in shell companies in secrecy havens that intentionally manipulate rates
- C. They invest in a way to hide funds rather than get a high rate of return
- D. They invest in high risk ventures with high rates of return
Answer: D
NEW QUESTION 203
In relationship to life insurance business, the third European Directive states that Member States may allow the identity verification of the beneficiary under the policy after the business relationship has been established, but before which events?
- A. At or before the policy is issued to the beneficiary by the insurance company
- B. At or before 30 days of the relationship being established under the policy
- C. At or before a premium payment has been accepted for the policy purchased
- D. At or before the time of payout or before the beneficiary intends to exercise rights vested underthe policy
Answer: D
NEW QUESTION 204
Which three statements are true regarding the extraterritorial reach of laws and legislation of the U.S.?
- A. The extraterritorial reach covers all transactions throughout the global economy
- B. Economic and trade sanctions by OFAC may pose extraterritorial risks for financial institutions and businesses outside the U.S.
- C. The defendant does not need to know the funds came from an illegal activity under state, federal or foreign law
- D. The criminal anti-money laundering law can apply to transactions that occur partially overseas
Answer: B,C,D
NEW QUESTION 205
What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking?
(Choose two.)
- A. Correspondent banking is an inherently high risk business and all correspondent bank relationships should be reviewed on an annual basis.
- B. At least one person, aside from the person sponsoring the relationship, should approve the correspondent relationship.
- C. An Institution may assign a low risk rating to a correspondent bank located in a jurisdiction deemed to have an adequate AML environment (e.g., Financial Action Task Force member country) without needing to consider other factors.
- D. Factors such as politically exposed person involvement and downstream (nested) correspondents increase the risk inherent in a correspondent relationship.
Answer: A,B
Explanation:
Explanation/Reference: https://www.wolfsberg-principles.com/sites/default/files/wb/pdfs/wolfsberg-standards/8.%
20Wolfsberg-Correspondent-Banking-Principles-2014.pdf
NEW QUESTION 206
Which type of transactions present the highest risk?
- A. Wire transfers from a publicly listed company
- B. Social insurance payments
- C. Foreign exchanges
- D. Payroll payments
Answer: C
NEW QUESTION 207
Historically, a tour guide has made monthly cash deposits averaging $10,000. Over the past three months, the monthly deposits have averaged $100,000. When the financial institution questions the increased deposits, the tour guide explains that there have been numerous conventions in town so business has increased substantially.
Which further action(s) should the financial institution take?
- A. Perform further investigation, if appropriate report the activity to the authorities and consider terminating the relationship
- B. Immediately terminate the relationship
- C. Perform further investigation, if appropriate report the activity to the authorities and place a limit on future transactions
- D. Schedule a periodic review of activity
Answer: A
NEW QUESTION 208
An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. What is the most important recommendation for the expert to make given it is an on-line bank?
- A. The bank should ensure that a firewall is set up to protect the transactions
- B. The bank should set up automated programs to analyze transactions for money launderingactivity
- C. The bank should ensure that prospective new customers can be properly identified
- D. The bank should limit the amount of money which can be processed per transaction
Answer: D
NEW QUESTION 209
Which of the following reflect money laundering risk indicators in relation to a securities account?
1. A high level of activity in that securities account immediately followed by a high volume of securities transactions.
2. Frequent wire transfers into an account immediately followed by debit card transactions.
3. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.
- A. 1 and 3 only
- B. 2 and 3 only
- C. 1, 2, and 3
- D. 1 and 2 only
Answer: B
NEW QUESTION 210
According to the Financial Action Task Force Special Recommendations on Terrorist Financing, what should an anti-money laundering specialist do if the specialist has reasonable grounds to suspect funds are linked or related to terrorist acts?
- A. Conduct a full due diligence review of the client
- B. Contact the institution's legal advisor
- C. Inform the institution's managing Board of Directors
- D. Promptly report it to the competent authority
Answer: D
NEW QUESTION 211
When providing reporting of STRs to the board, which of the following should be provided?
- A. All the STRs filed with the national FIU
- B. A numerical summary of all the STRs and a summary of key STRs, including PEPs, key employees
- C. A summary of all key STRs, including PEPs and key employees
- D. A numerical summary of all the STRs
Answer: C
NEW QUESTION 212
A bank has opened a new account for a well-known attorney to manage client funds. During the first six months, bank staff observe the account receives multiple deposits via wire transfer. They also observe that the attorney withdraws cash, makes payments to various people, and transfers funds to the law firm's account online.
What is considered a red flag for potential money laundering in this situation?
- A. Transferring funds to his law firm's account online
- B. Receiving multiple deposits via wire transfer
- C. Withdrawing cash
- D. Making payment to various people
Answer: B
NEW QUESTION 213
The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A.
In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country
B. Each cash transaction always totals exactly
$8,000.
What should alert the agent to possible money laundering activity by the two customers?
- A. Each of their transactions is just below the cash reporting threshold
- B. They have been coming in three times a week
- C. It is unusual for customers to remit to Country B
- D. They remit funds to the same person
Answer: D
NEW QUESTION 214
An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.
What are two red flags that indicate how trade-based money laundering could be occurring in this instance?
(Choose two.)
- A. The type of commodity being shipped appears inconsistent with the exporter or importer's regular business activities
- B. Significant discrepancies appear between the description of the commodity on the bill of lading and the invoice
- C. The transaction involves the use of front (or shell) companies
- D. The packaging is inconsistent with the commodity or shipping method
Answer: B,C
NEW QUESTION 215
A retail bank has just acquired a credit card business. The bank's anti-money laundering policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis.
Is the bank's existing anti-money laundering training adequate to be delivered to employees of the newly acquired credit card business?
- A. Yes, the existing training covers the anti-money laundering regulations that the bank is required to follow.
- B. No, anti-money laundering training needs to be delivered face-to-face for credit card businesses.
- C. Yes, the existing training covers the bank's policies, procedures, and processes.
- D. No, anti-money laundering training needs to be tailored and focused on the risks specific to the business.
Answer: A
NEW QUESTION 216
Which statement about U.S. Specified Unlawful Activities (SUA) is true?
- A. SUAs are limited to crimes that occur within the borders of the U.S. and its territories and possessions
- B. At least one SUA must be proven in order to pursue a money laundering conviction
- C. In order to secure a conviction, the defendant must be proven to have known the precise nature of the source of funds
- D. SUAs are generally limited to a small sub-set of crimes
Answer: B
NEW QUESTION 217
A periodic review of the account of a small household goods business reveals multiple shipments of goods to a country classified by the bank as high risk. They were transshipped through another country prior to the final destination. In the past three months, volumes over 25,000 units. The business has been a customer of a bank for 10 years.
Records show previous shipments to destinations primarily in Europe involving quantities of 5,000 units or less.
Recent shipments are listed as being received by the same company as the earlier shipments and payments are being received from the same originator, but the unit price of the goods is three times higher than before.
Which two red flags indicate potential trade-based money laundering? (Choose two.)
- A. The size of the shipments appear inconsistent with the exporter's previous business activities.
- B. The shipments of the same goods are now going to a different location.
- C. The goods are shipped to a jurisdiction that the bank classifies as "high risk" for money laundering activities.
- D. The goods are transshipped through one or more jurisdictions for no apparent economic reason.
Answer: A,C
NEW QUESTION 218
Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?
- A. Local privacy and data protection laws may prevent an affiliate from sharing information.
- B. Enterprise-wide compliance oversight rules issued in the global institution's headquarters country will override any local limitations in other countries.
- C. The institution should consult with the customer and request permission to conduct a full investigation into all the accounts.
- D. Certain account documents may be stored only in local language which will prohibit a global assessment.
Answer: B
NEW QUESTION 219
Pursuant to the Third European Union Money Laundering Directive, how long after being out of prominent office should a person NOT be considered to be a Politically Exposed Person (PEP)?
- A. 3 years
- B. 2 years
- C. 1 year
- D. 4 years
Answer: C
NEW QUESTION 220
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